S&P: eircom view now negative

Standard & Poor's said it revised its outlook on eircom Holdings (Ireland) Ltd. to negative from stable and affirmed the B long-term corporate credit rating on eircom, as well as the B issue rating and 3 recovery rating on the company's senior secured term loan.

"The outlook revision reflects our view that the next two years will be extremely challenging for eircom, putting pressure on the company's cash generation," S&P said in a news release.

For years, the company under invested in its network, S&P said. As a result, it is now investing large sums into several important projects (roll-out of fiber, the launch of 4G, and the development of its Internet Protocol TV service) to defend its market shares and margins. eircom also faces an increase in the competitive environment with the entry of a new player in the fixed-line business and continuous strong performance of certain competitors, particularly in broadband and mobile.

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